Programme Director

Members of the Executive Council

Mayors

Chairperson of the Portfolio Committee on Agriculture and Rural Development

Councilors

Distinguished guests

Members of the media

Ladies and gentlemen

Molweni, sanibonani, dumelang, goeiemore, good morning, ladies and gentlemen.

Thank you for coming to this important event, today we are officially launching the Flower Agricultural Park. The Gauteng Provincial Government is committed increating an environment for more labour-intensive production methods, procurement policies that support local jobs and building public-private partnerships. This is in line with the commitment made in the ruling‘s party manifesto, to ensure that this is implemented in 2008 GDARD developed a Gauteng Agricultural Development Strategy. Among the pillars of the strategy was the development of agricultural hubs

This is one economic sector that has been targeted as a growth focal point - specifically due to its potential for job creation and poverty alleviation. Thus, this agricultural sector, defined by as all activities relating to agricultural input provision, farming and the processing and distribution activities that add value to farm products, is a sector of critical importance. The agricultural sector addresses two of the basic human needs, namely food and fibre (also see the USDA’s definition of sustainable agriculture), and, according to the NDA, it is an important engine for growth in all sectors in the economy due to its forward and backward linkages to these. Purchases of goods such as fertilizers, chemicals and implements form backward linkages with the manufacturing sector, while forward linkages are established through the supply of raw materials to production processes within the manufacturing sector.

While the relative importance of the agriculture sector differs across provinces - in terms of their contribution towards the economy - it remains a key component of Government’s plan to see poverty alleviated in the short- and medium-term. Each province has the responsibility to harness the potential of its agriculture sector to the fullest extent in a bid to secure both commercial and - very specifically - subsistence farming across South Africa.

In 2008, GDARD started piloting the projects within the hubs by conducting the feasibility and viability studies. The pilots were done in two identified horticultural hubs, the West Rand District Municipality (WRDM) as well as former Metsweding District Municipality (MDM) (now Tshwane Region 5 and 7). In 2009 the feasibility studies were done by GDARD and SAFEC including the relevant municipalities. Four sites, i.e. Randagate, Witpoortjie, Mamelodi and Onverwacht were identified for piloting and production inputs mainly (seedlings, fertilizers, chemicals and in this case Onverwacht Flower Agri Park was also provided with 2 shade nets structures (40mX30m) as they did not have any facilities) were supplied in those sites.

This was a brainchild of Zonation of High Potential Agricultural land by the Gauteng Department of Agriculture and Rural Development (GDARD) in 2006. The Zonation culminates to the demarcation of agricultural hubs, which were launched in 2006. GDARD entered into agreement with the South African Flower Export Council (SAFEC) with the aim of assisting the department by facilitating the implementation of agricultural flower projects within the identified Agricultural hubs.

After one production season it was concluded that Onverwacht Flower Agri Park would be the viable option due to location as well as other means of production (water, land and labour). During 2010/11 financial year, the department supported Onverwacht Flower Agri Park by erecting 8 more shade net structures (40mX30m), providing two more 5000litre tanks, irrigation design and installation in all shade nets structures and supplying of pumps to the project.

The same year, GDARD with Tshwane Region 5 and 7 procured production inputs for most of the tunnels with SAFEC and beneficiaries being the implementers. Metsweding Entrepreneurs Development Agency (MEDA) also assisted the beneficiaries to form a co-operative and provided guidance on company registration and provided them with the skills to manage the park after the state exit.

The Agricultural Park model aims to develop agricultural entrepreneurs at the same time ensuring hands-on skill transfer within the boundaries of a single geographical farm. The main aim of the flower park is to create an environment for full integration of the agricultural value-chain, which will emphasize backward and forward linkages and thereby ensuring beneficiation that is well integrated into their development and operations.

This collaboration is expected to create more jobs and support the sustainability of current jobs in future. Currently the project employs 8 permanent jobs and 25 temporary jobs per season. The project supplies their produce to Johannesburg Multiflora auction. During the first production season, Onverwacht Flower Agri Park managed to sell 2400 stems to Multiflora a significant number considering the fact that this was their 1st production and they are new to the industry. To penetrate Multiflora market is every flower producer dream, due to their strict measures on volume, quality and consistency, however Onverwacht Flower Agri Park managed on their first year of production.

Prices of agricultural commodities are naturally volatile. The typically stable trend of demand, combined with inelastic yet volatile supply, means that prices alter considerably depending on supply conditions. Supply growth has been relatively constant over the last five years, as much of the land suitable for farming is being used.

Governments have responded to rising food prices by introducing price controls, increased subsidies, reduced import barriers, and restrictions on exports designed to benefit consumers, but growth continued in 2008 as demand prevailed and mature markets continued to distort the market. The fall in consumer spending caused a 10.8% drop in global prices through 2009, but pricing strength should recover over the next three years.

However, the forecast for the agricultural sector is always fragile because of the number of non-economic factors that affect the demand and supply of output. Weather heavily affects production from year to year. As global warming and climate change accelerates, volatility in output will increase. Droughts and floods will become more commonplace and intense, reducing yields and making farming more costly.

The department is committed in ensuring that the Agri hubs are a success and working with you, hand in glove we will overcome these challenges and really put Gauteng and South Africa with the best flower producers in the world.

It is also important to establish Agribusinesses. This is because they can add value in a surprising number of ways. Value-adding is driven by a thorough knowledge of consumer needs, local resources and production processes. It can occur at any stage of the production process and can include creative new uses of previously unconsidered resources or by-products.

Marketing is a key part of the value-adding process. It might focus on increasing understanding of the health benefits, the convenience advantage or the environmental safety of a product. These are communicated through processing, branding and advertising so the consumer can see the benefits of the new value-added product

Working together we can do more!

I thank you.

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